Arabtec Chief Ismaik Quits After Market Punishes Shares

June 18 (Bloomberg) -- Arabtec Holding Co. Chief Executive
Officer Hasan Ismaik resigned after the United Arab Emirates’
biggest listed construction company lost a third of its market
value in less than two weeks.

Ismaik said he had stepped down and would consider selling
his 28.84 percent stake in the company if he gets an offer.
Arabtec board member Mohamed Al Fahim will take over as acting
CEO, according to two people with knowledge of the matter
who asked not to be identified because the information is
private. An Arabtec spokesman declined to comment before a
board meeting.

“If approached by any government entity to buy my stake, I
would consider the offer,” Ismaik, who was appointed CEO in
February 2013, said by telephone. He said he no longer holds any
positions with the company.

Ismaik’s departure follows share-price declines on
speculation ranging from the possible delisting of the stock to
the CEO’s ouster. Arabtec suffered its worst weekly drop since
March 2012 and is down 42 percent from a record 7.40 dirhams in
May. Abu Dhabi state-run Aabar Investments PJSC, the company’s
second-biggest shareholder, cut its holding last week, fueling
concern that the builder may be losing government backing.

Acting Arabtec CEO Al Fahim currently heads the financial
division at International Petroleum Investment Co. and he
previously worked at Abu Dhabi National Oil Co., KPMG LLP in
Dubai and HSBC Holdings Plc in London.

‘Abu Dhabi Support’

“The news should be taken positively as it will put an end
to speculation,” Hisham Khairy, the Dubai-based head of
institutional trade at Mena Corp. Financial Services LLC, said
by e-mail. “We should see a rebound before any selloff again;
4.70 dirhams could be the target.”

Arabtec climbed 1.9 percent to close at 4.30 dirhams in
Dubai trading today.

Ismaik’s resignation ends a 15-month stretch that was
marked by a soaring share price and ambitious growth. The CEO
announced plans to turn the company into a top 10 global
contractor, expanding into areas including oil and gas and
infrastructure. Arabtec formed a joint venture with Samsung
Engineering Co. to provide engineering, procurement and
construction services.

Share Surge

Even after the recent slump, Arabtec’s stock has doubled
this year. The builder, which helped construct the world’s
tallest tower in Dubai, signed an agreement in March with
Egypt’s Defense Ministry to build 1 million affordable homes
worth an estimated $40 billion.

The person in charge of the company is less important than
its ownership, according to Nayal Khan, the head of
institutional sales and trading at brokerage Naeem Holding in
Dubai. “The only thing relevant is Abu Dhabi’s support for
Arabtec and Aabar’s shareholding in the company,” he said by
telephone.

Ismaik was named a non-executive board member in August
2012 before being appointed CEO. He’s also chairman of Al-Ashmal
Real-Estate Investment Co. in Jordan and Abu Dhabi-based HAMG
Group, among others. He owns 60 percent of shares of German
sports club TSV Muenchen von 1860 GmbH & Co. KGaA.